The thing you have to understand about the Wall Street Journal’s last stand against the Smith-Wyden tax deal and its Child Tax Credit expansion is that their position has nothing to do with the details of the deal. That’s why the arguments are so bad, and often border on bizarre. (See: Debunking Myths About the Tax Deal.) They would have opposed anything that provides more support to working families, and now they’re working backward to find a way to block this.
Here’s the Wall Street Journal in 2017, editorializing against the successful effort by Senators Rubio and Lee to expand the Child Tax Credit in the Tax Cuts and Jobs Act. The Journal’s editorial board called the Child Tax Credit “a special favor for taxpayers.” They worried it “favor[s] one kind of behavior (having children) over another” and compared it to a subsidy for buying a Tesla. They complained it wasn’t pro-growth and suggested a bigger corporate tax cut instead. Even back then, they were warning without evidence or even analysis that it “discourages work.”
Note also that back then the Journal was already predicting a slippery slope to a “fully refundable” credit for families that don’t work, a prediction that has since been empirically refuted. Democrats did slide down the slope for a year in 2021, and got firmly rebuked. The public didn’t like it and Congress refused to extend it. Unlike the Journal, the American people can tell the difference between support for working families and unconditional cash payments. The question now is, can conservatives?
This is a pivotal moment for the conservative movement, which has finally woken up to the reality that decades of WSJ-style economic policy have been a disaster for working families and thus a disaster for America. Senators Romney, Daines, and Burr developed an innovative Family Security Act. Senator Hawley has proposed the Parent Tax Credit. Senators Rubio and Lee have proposed a dramatic expansion of the Child Tax Credit. President Trump has proposed a baby bonus. These proposals all have their strengths and weaknesses, but they have in common two principles that must be fundamental to conservative policy going forward.
First: Family is good, and public policy must not be neutral on the question of having and raising children. A child is not the same as a Tesla. There is no parallel between a child and a pet, as one Journal editor tried to imply in an especially obtuse column (“The IRS shouldn’t favor Child Moms over Dog Moms”).
Second: Supporting family means supporting working families. Recall that in all the talk of globalization’s wonders, economists would often murmur that of course there would be losers but the winners could compensate them. Well, congratulations, we’ve now gone through decades of making it harder for the typical worker to support a family. In the 1980s, 40 weeks of the median male income could provide middle-class security for a family of four. Now it takes 62 weeks, which is a problem, there being 52 weeks in a year. And yet, at the first sign of trying to follow through for those who find themselves working hard but falling behind, the Wall Street Journal screams “hand out” and “redistribution.” Methinks they never had any intention of helping anyone. Shame on any conservative who goes along with this bait-and-switch.
The Smith-Wyden deal is not perfect, but it represents good progress. (See: Putting the Money Where the Working Families Are.) And, importantly, it is not permanent. As conservatives lock in their final positions on it, they should look past the ends of their noses to 2025 and beyond, when family policy will remain in focus and indeed only become more important. Taking the Wall Street Journal line now would leave them paralyzed going forward. If providing support to working families is just “welfare,” even when it encourages a household to get somebody into the labor market, no proposal will pass the test. Of course, that’s what the Journal wants. But it’s not something any conservative should accept.